Yet More Energous

It's been a busy few days on the Energous front, and will likely stay that way with CES coming up, along with watching how their share price will fluctuate and if any more insiders have cashed in. We'll almost certainly see plenty of new information and revelations, which will come in a little at a time, and it's hard to judge if they should just be included as addenda or merit a post in themselves. My last post had a few additions to it since I first published it, and it got to the point where I'm going to regurgitate some of it in a new post. If you read that post really recently, there won't be too much new here for you.

Before I begin though, I just want to remind everyone that this is a system that needs a safety cutoff and an exclusion-zone larger than the operating-zone to charge your phone in about a week, at closer than 1 meter (if at all), if you hold it perfectly in alignment. Sounds amazing, doesn't it?

Energous have, until now, relied on ambiguity and vague promises which could not be argued with due to lack of information, but data is now public due to the FCC filing. This data now gives us the first concrete (though incomplete) numbers to show what those with an understanding of physics and RF have always suspected - there's nothing new or amazing here. Energous are not finding that "one weird trick" that bypasses the laws of physics, or have a Nobel-prize level discovery. The emperor really does have no clothes, but instead has an awesome marketing and PR department.

A summary of what's here:

1) Energous could increase the power delivered, but would then have to increase the size of the keep-out-zone, likely to room-scale for most reasonable charge rates. This is also dependent upon perfect receiver alignment.

2) Charge rates shown in the FCC report look to be for phone-sized objects. Move to wearables and the power delivered will drop, likely significantly.

3) The system has very poor beamforming capabilities and the point of highest power is not often at the target location. It is not a precision system, comforting when it can hurt you...

4) Some people are mistakenly reporting that the system transfers power at ~2.4GHz with a max 400 microWatts. This is the communications part of the system, not for power transfer.

5) The system shown in the FCC filings is vastly inferior in every regard to the promises from January 2015.

More Power!

Energous appear limited in how much power they transmit primarily due to the SAR restrictions, which they are currently at. The FCC data shows they are at 0.966W/kg at 50cm, while the limit is 1.6 W/kg. If we assume a measurement and manufacturing tolerance of 2 dB total (63%) then that takes the 0.966 to 1.58 W/kg - basically they are working at the limit, there's no more headroom here to expand.

What can get them more power at any given location is to extend the "keep-out-zone" further, essentially the distance from the transmitter at which the SAR value is around 0.97 W/kg. Now we are dealing with near-field effects so it's hard to say exactly, but let's for now say that the SAR power value increases linearly with the receiver power value. Let's increase the power at 90 cm from 30 mW to 45 mW - in this case the keep-out-zone moves to 75 cm and your phone still isn't charging. Now double to 60 mW and the zone is at 1 meter - you're standing inside the unsafe perimeter and the system will of course shut off, your charge rate is zero. And your phone wouldn't charge anyway. Now let's raise the power to 500 mW, the bare minimum to charge a phone, and the keep-out zone is now 8.3 meters - larger than the room you're in and probably the room next to it, and the one after that as well.

Depending on beamforming the exclusion zone may increase slower than that, but even under best case assumptions it's still expanding to room-sized danger zones for pretty pathetic charge rates.

No! You're not holding your phone correctly!

Also remember that these numbers in the FCC report are for a receiver in perfect alignment for the transmitter - rotate 90 degrees in two out of three axes and you get nothing. Even rotating in the other axis reduces power by around 20% at 50 cm. 

Consider how you stand and hold your phone while using it - likely at around 45 degrees to the floor. You'll probably lose a good 30% of power at least, not including what your hand might absorb instead. Now consider how you place your phone on a table when you're not using it - flat. With that orientation, you're getting close to the "nothing" for power delivery. Actually use your phone, and charge rate will vary considerably but the key thing is this - the numbers you see reported by Energous are as good as it will get, under perfect circumstances.

Low Power for Phones - Ideal for Wearables!

As the initial excitement of the Part 18 approval fades, it's becoming clear to even the most ardent Energous supporter that the power levels here are so low as to be useless for phone charging, even if they increase by near an order of magnitude. What I'm seeing though from the Energous faithful is grasping at "charging wearables" as the killer app for Energous. Unfortunately, that's just not going to happen either.

The receive antenna Energous use is likely a half-wave dipole antenna (think the bars in a TV antenna), and given wavelength at 913 MHz is 33cm, a half wavelength in free space is 16.5 cm (half wave dipole antennas are actually slightly shorter than the free space half wavelength). Given a phone is usually 10 to 14 cm long, the antenna will be close to that, not perfect but some dielectrics around it and it's close enough. Some info on effective antenna area is here.

Now look at your watch - how large is that? What's the size of an antenna you can put in there? It's much smaller, with a reduced size comes reduced power delivery, and at around 1 to 2 cm probably quite a reduction. Maybe they can use a patch antenna and get the size needed down with a high value dielectric? We'll conveniently forget that patch antenna are highly directional, even more than what is seen in the FCC test. In that case the patch impedance gets high, and the power gathered will drop (power is voltage squared divided by impedance). Here's an online tool for calculating patch antenna sizes and impedances - in this case it fits in a wearable, at around 16 by 24 by 2.0 mm, but at 4.5 kOhms will produce about 1.5% of the power of a standard 70 ohm half wave dipole antenna. Oh dear.

Then we have the orientation issue - this thing is on your wrist or body, right? How do you ensure perfect orientation to get the power needed? Good luck there.

AirPods have a 1.5 Wh battery - standard perfectly at the 50 cm danger-zone limit and if you get the maximum 100 mW they'll charge in 15 hours. Except they won't, you'll get a fraction of that, and if you move the system shuts off.

So no, wearables aren't going to cut it for the huge market either.

Where's the Power Going?

When using a phased array to send power with precision, you ideally want a large grid of transmitters spaced half a wavelength apart, many many wavelengths total on each side, and a target far enough to be in the farfield (many wavelengths away). At 913 MHz, Energous have a line of only 12 antenna, spaced 0.2 of a wavelength apart, about 2.5 by 0.2 wavelengths on each side, and a target barely 2 wavelengths away. It's an awful design if you want to try to control where the beam goes, and you can see that in their own beamplots. The star in the image below is where the power is supposed to be beamed - does this image fill you with confidence as to what's getting powered?

This arrangement might have been enough if they could operate at 5.8 GHz and wavelengths were over 6 times smaller - but the FCC killed that, as no doubt the system wrecked any wWiFi in the vicinity.

Bottom line - this thing sends power everywhere and there is no precision about it. IMO it's a brute force attempt to simply get FCC approval under Part 18 and damn the practicality.

The 2.4GHz Band is for Communications, Not Power

I'm seeing quite a few people refer to the 2.4GHz band Part 15 approval that was granted (in addition to the Part 18 approval for 913 MHz) where maximum power of 0.4 mW (400 millionths of a Watt) is stated. This is not for power transfer, this is Energous getting the communications component of the system approved.

They state they use the 2.4GHz band, Bluetooth LE, for the receiver to communicate to the transmitter that at least 30 mW is being received to continue power. It is not the maximum power transferred - as much as Energous send out tiny amounts of power, this isn't the number to be looking at.

Diminished Expectations

Energous launched with the promise of charging multiple devices, at up to 15 feet, at multiple Watts. Here's part of their January 2015 media blitz:

A new wireless power “router” being shown at CES can charge multiple devices in a 15-foot radius.

The two-tone rectangular box you see mounted on the wall up above is a WattUp transmitter from the wireless power people at Energous. WattUp is capable of delivering .25W to 12 devices or 4W to up to four devices (up to five feet away, dropping to 1W at 15 feet) at the same time, and it’s smart about how it does it.

Inside the “router” there’s a Bluetooth module. It sniffs out compatible devices and helps establish connections to them. Once they’re connected, power is beamed out over frequencies in the 5.7-5.8GHz range, but it doesn’t just constantly blast devices with RF power packets.

Here's the CEO from the Q3 2015 earnings call.

Here is a brief summary of the results of the amount of actual power delivered to a device at varying distances with a single WattUp transmitter. Power received at zero to five feet measured 5.55 watts compared to our targeted performance of 4 watts. Power received at five to 10 feet measured 3.74 watts compared to our targeted performance of 2 watts and power received at 10 to 15 feet measured 1.06 watts compared to our targeted performance of 1 watt.

5.5 Watts compared to around 100 mW (at best)? Only a factor of 55 to 165 off after a further 2 years of work. Talk about diminished expectations. How can the bulls continue to support Energous after such a letdown? I guess it's better to continue to support than admit you were bamboozled by them.

Did they actually get that amount of power transferred? It's possible, you just have to be damn sure the transmitter is in a Faraday cage or you're a looooong way from it when it's switch on. Put those power numbers into the SAR danger-zone distance and you're looking at 10's of meters, and most likely polluting the surrounding spectrum outside the 902 to 928 MHz range in violation of FCC Part 18.305. I hope their staff weren't exposed to that!

Until the next post, take care, and Happy New Year to all.

Energous - It Just Keeps Getting Worse

Earlier this week wireless power company Energous announced their FCC Part 18 approval, and it sent the shares skyrocketing - after all, surely the sky's the limit now? My two posts, here and here, were quick analyses at the time, and I've had the chance to dig into things a bit more over this holiday weekend, as well as have discussions with other engineers on the topic (thanks to you all for your efforts!). A summary of what I'm going to say below is this:

1) Energous are currently sitting at international safety limits. This is basically as much power as they will ever transmit.

2) Executives in Energous took the opportunity to sell stock for ~$3.5 million.

3) A serious investment research company, Citron Research, are publicly calling Energous deceptive.

4) It's still shocking the Chairman of the FCC publicized this in the way he did. 

Power Limits

What Energous were touting with this approval is that unlike FCC Part 15 that will limit them to mW level transmission (or 1 Watt spread spectrum like Powercast use), Part 18 is in theory "unlimited power". Energous use 12 antenna each at around 0.875W for a total of around 10 Watts output, compared to around 1W from Powercast. So if unlimited, why only 10 Watts? Why not 100 or 1000 Watts? Something else must be limiting them - and that they have a 50 cm "keep out zone" for safety tells you what that is.

SAR is Specific Absorption Rate and is a measure of how much power a human body can absorb when in the vicinity of Radio Frequency (RF) equipment like microwaves, phones, or in this case wireless at a distance power. The FCC has several pages on this, and it's an international limit, though the US and a few other countries actually implement slightly more stringent limits. In the US these two critical limits are Head Localized SAR at 1.6 W/kg and Whole-body Average SAR at 0.08 W/kg - these are maximum values that cannot be exceeded. 

Given manufacturing tolerances and measurement error, any safety conscious company will set the limit well below this number - for example in the medical ultrasound world there is a similar limit called the Mechanical Index (MI) set by the FDA at a value of 1.9. Most companies set the internal limit at 1.3 or 1.4 so that they know even the most widely varying device will never go over. Setting a 30 to 40% margin is pretty reasonable. So what is the value of SAR for the device Energous got approved this week? You can see that here on Page 7:

There you have it, 0.966 W/kg with the 1.6 limit, and 0.043 with the 0.08 W/kg limit. Even under the most lenient of circumstances, and allowing no margin for tolerance or error, Energous could at best double the power out from this system. So they could, at best, charge at 60 mW at 90 cm from the receiver. That is about 10 to 20% of what is needed to maintain charge of a phone in use, and about 1% of the power from a Qi charging pad. Pretty pathetic.

There's really no way around this - any increase in the power to the receiver will up this number, or increase the keep-out-zone significantly (see below). They are tied together, and while you can play games at the margins, you increase one and you increase the other. Basically, there is no way for Energous to increase their charge rate without exceeding the SAR limits at useful distances.

I'm sure they are now on the hunt for an exemption from that limit, or otherwise game the system, and given how friendly the FCC are to Energous perhaps they'll achieve this - but that will be to all our detriment as phones and other equipment will demand the same, and we'll all be living in a slightly more risky world.

Insider Profit Taking

Share price of Energous rocketed after the FCC announcement, shooting from under $10 a share to over $30. Here's the action for this week - see if you can guess where the announcement was made!

In the conference call, the CEO stated it was the beginning of an era of "unlimited power", surely this is a multi-billion dollar comapny and the executives know that their stock is going to the moon an they're going to hold onto the stock knowing what it's worth? Errr, nope. There was a bunch of insider sales this week:

CEO Stephen Rizzone sold about $1.95 million of stock, founder and CTO Michael Leabman sold around $610,000 of stock, Director John Gaulding sold around $750,000 worth, a Senior VP sells a piddling ~$100,000... The SEC data is here, and we'll see in the next 3 days who else sold.

So - simply "taking some money off the table" or is it a sign the executives of Energous know the value is going down? (Thanks Mukticat of SeekingAlpha for noticing this).

Abuse of a Government Position?

It continues to shock me that the FCC Chairman tweeted about the approval and linked to Energous PR materials, while referencing Energous board member Marty Cooper. 

The @FCC has approved the first-ever wireless, "power-at-a-distance" charging technology. @Energous' #WattUp could allow multiple devices to be recharged up to 3 feet away, regardless of manufacturer. https://t.co/6zdj8hxO7R cc @MartyMobile

— Ajit Pai (@AjitPaiFCC) December 27, 2017

It's not even accurate as Powercast had FCC approval a week earlier (Part 15), while there is nothing in the FCC approval data that shows multiple devices or actual recharging levels of power. He then links to a private company press release as well as including his friend Marty Cooper, Energous Director. From the Department of Justice.

This is, in my opinion, a gross abuse of a federal agency position and it's another sign of how far our standards have fallen in this era of Trump. At this point I have to wonder if someone should look if the Chairman himself is profiting from this, given the brazenness of the 'looting' I'm seeing in the public sphere.

Energous and "Deception"

Citron Research posted a bearish take on Energous, stating the company had a history of deception. Citron tend to focus on companies they claim are overvalued or are fraudulent, and often short-sell them (bet on stock price going down, not up).

$WATT Co has a history of deception and the recent FCC info is no different. Tech is not ready for primetime and the loss of Apple for Dialog, death to the rumor. Roth upgrade was as ridic as their defense of Unipixel until BK. Powercast at CES will expose why $WATT to $15

— Citron Research (@CitronResearch) December 29, 2017

From the stock price action yesterday, they may be right - it will be interesting to see what happens on Tuesday.

Regular folks, feel free to stop here, what follows below are more detailed discussions on technical side. Edit: Since I kept adding updates at the end of this post, I wrote a new post to make it a bit more coherent - you can read it here, and covers most of what I say below.

Other nerdy stuff
Page 13 of the test report does not report the field strength at 300m, just states "no non-compliance noted". Pages 18 and 19 do show the results around the transmission frequency, and claim to be in compliance by between 5.5 and 7.3 dB. If this were a limiting factor, they'd push those to 0 - further indication it SAR that's stopping higher power output.

FCC documents show the volume of the transmitter to be 790 x 65 x 235 mm, in a curved C shape, with 6 antenna in each arm evenly spaced. Very roughly, this puts each arm at about 36 cm, so about a 7 cm spacing. Given the wavelength at 913 MHz is 33 cm, it's around 0.2 of a wavelength, while ideal phased array spacing is around 0.5 wavelength. At 2.4GHz it's almost exactly 0.5 wavelength, while at 5.8 GHz it is about 1 wavelength. Previous statements from Energous were that the mid-range would work with the Watt-Up Mini at 5.8GHz, so I wonder if this is the base they expected to use at 5.8GHz with twice the number of transmitters but were denied by the FCC due to WiFi interference, and then tried again at 2.4GHz with the same number, but were also denied?

Table 8 in the evaluation report makes it clear that the field is not smooth - you'd expect that straight ahead from the array along the central axis would be the highest power, yet as you move to the side by 15 or 30 degrees you can see that the field strength often increases slightly. While the coarseness of the sampling makes it difficult to say with certainty, I'd guess that this is still in the nearfield of the system and as such you've got a lot of peaks and troughs. It may also be why the "keep out zone" was set at 50 cm - perhaps closer than that is so variable that you may have hotspots way in excess of the SAR.

This is possibly further evidenced when you look at the field plots in XY - you can see that as they try to focus to given locations where the object under charge is, the field is significantly stronger just about anywhere but the charge point (the star). Not surprising though, given they only have 12 antenna that are so close together. This is what makes the data in Table 7 so confusing - the reported peak number is *not* where the location data would suggest it is, it's much better to look at the YZ data instead. In the above images the star is the supposed target - pretty awful beamforming. Below you can see how the results are so much clearer in YZ.

So using this data, we can see that the peak field strength at around 30cm is about 89V/m (Table 7), then using the other data from Table 8 at 0 degrees, we can see the field strength decay as follows:

Surprisingly close to 1/r for what is near field - it may simply be sampling, but it's the data we've got to work with. If I then assume that they manage to use some dielectrics to squeeze a dipole antenna into an iPhone sized device at 10cm, with an RF to DC conversion efficiency of 60%, and using an impedance of 70 ohms (antenna standard). I get the below values.

The Power column gives around 100 mW at 85cm but Energous state that it's around 30 mW at that distance. The "Scaled Power" basically applies that scaling, and shows you get around 160 mW at 30 cm from source (in the "keep out zone"). It broadly matches the number in the Barron's article that says:

In an email, Energous said that the "transmitter, as published in the certification, is 10 watts of conducted power and greater than 100mw of power received into the receiving device.”

(Notice that is into the receiving device, not the battery, so 60 or 70% of that is actually useful power.)

Assuming this is something fixable in improved tech, you could maybe at best get a factor of 3 more out of the system, but that's highly unlikely. Under ideal circumstances with a perfect system you'd need to be closer that 35 cm or so to charge a phone (in >10 hours at best). It's also 1% efficient at best, as I estimated in my first post. At those close ranges Pi charging should beat them easily. This bit is definitely hand-wavy, lots of assumptions in this bit.

So you've got a system that has to have a safety zone cutoff, barely charges at a fraction of a Watt, single digit efficiencies, sends power almost everywhere but where you're charging, and can't get any more powerful due to international safety rules. Very good.

And to other wireless power companies talking to their investors and customers about Energous and how they are "exaggerating" - don't think I don't know you're using my posts here, they talk to me too. It's amazing how I'm suddenly so useful now... :)

Update later on the 30th December
On the SeekingAlpha forum, contributor CommonSense asked:

Where was this SAR measured? Wasn't it at 50 cm? If so, they can increase the power as much as they want, just increasing the exclusion zone.

My answer (condensed):

Yes, page 42 of the SAR Evaluation Report says the values were taken at 50cm. I don't think there is a way, however, to increase the power to a usable amount without placing everyone in the room in danger. It seems certain increasing the power to any level useful for a phone would mean you could not actually be holding it as it charges. I expect the exclusion zone would expand somewhere between linearly and with the square root of the power increase.

For example linearly, if you increase the power at 1 meter to 100 milliWatts, you've gone up a factor of 3 or so, and if you assume that SAR goes up the same, your exclusion zone is now at 1.5 meters and you can't be holding the chargeable device. If you assume the average room is 3 meters across then you can get to 200 mW at 1 meter charging except you can't be in a room with the charging device.

Going with the square root, which is the worst case, to get to 600 mW which really is a base to charge something like a phone, you've increased your exclusion zone by 20^0.5, so it's now 2.25 meters. There's no way I can see that gets you to a reasonable charge rate without being inside the exclusion zone.

Also, at that point, you also have to start being concerned about the power outside the 902 to 928 MHz range. Right now they have about 5.5dB margin on that before that is an issue. If that increases the same as the output power, they can only increase by a factor of 3 before that becomes an issue. Not sure how linearly they scale together, but at some point that becomes an issue too.

Update on the 31st December
A bullish commentator on SeekingAlpha makes the comment that 100mW at 0.5 meters is fantastic for wearables. I disagree with that for a few reasons:

1) The 100 mW reported will likely be for a half-wave dipole antenna of at least 10cm length. Any wearable will have a patch or smaller antenna which will be a lot less efficient, so you would be unlikely to ever see as much as 100 mW.
2) That 100 mW number was also for perfect orientation - rotate your wrist and you go down even further.
3) That 100 mW number is at 50cm, right on the edge of the "keep-out-zone". Move in a little and power shuts off, step away and it drops even further.
4) At 50 cm, a wire will charge your device faster, more efficiently, and be safer. From the looks of it, so will the Qi based Pi charging product announced recently.
5) Increase the power out so that you get 100 mW (ideal, peak) at 1 meter and you basically extend the unsafe zone to around 1 meter - so you might be able to leave your wearable in the field, but you won't be able to wear it.

So overall, you'd have a wearable that you can't wear to charge at way less than 100 mW, with under 1% efficiency, and is unsafe for pretty much anyone in the room.

Next Update 31st December
I may have to do a new post just to repeat all these updates...

I'm seeing quite a few people refer to the 2.4GHz band Part 15 approval that was granted (in addition to the Part 18 approval for 913 MHz) where maximum power of 0.4 mW (400 millionths of a Watt) is stated. This is not for power transfer, this is Energous getting the communications component of the system approved.

They state they use the 2.4GHz band, Bluetooth LE, for the receiver to communicate to the transmitter that at least 30 mW is being received to continue power. It is not the maximum power transferred - as much as Energous send out tiny amounts of power, this isn't it. Notice this was passed over 6 months ago, back when they were trying for Part 18 approval at 5.8 GHz (and 2.4 GHz?).

Interestingly, it doesn't tie the sending of power to the reception of that same power - only that power is received from somewhere. This means an aberrant other source could be triggering the "I'm charging" response, while the Energous transmitter is happily focused on something else and charging nothing, or someone's head. I do wonder why 30 mW was chosen as the cutoff, will consider.

Finally - isn't it interesting how the bulls are now saying it's great because Energous can charge wearables and it's a huge thing. Apart from wearables charging at a much lower rate, wasn't the entire company built on charging multiple devices at 15 feet at multiple Watts? Here's part of their January 2015 media blitz:

A new wireless power “router” being shown at CES can charge multiple devices in a 15-foot radius.

The two-tone rectangular box you see mounted on the wall up above is a WattUp transmitter from the wireless power people at Energous. WattUp is capable of delivering .25W to 12 devices or 4W to up to four devices (up to five feet away, dropping to 1W at 15 feet) at the same time, and it’s smart about how it does it.

Inside the “router” there’s a Bluetooth module. It sniffs out compatible devices and helps establish connections to them. Once they’re connected, power is beamed out over frequencies in the 5.7-5.8GHz range, but it doesn’t just constantly blast devices with RF power packets.

 Here's the CEO from the Q3 2015 earnings call.

Here is a brief summary of the results of the amount of actual power delivered to a device at varying distances with a single WattUp transmitter. Power received at zero to five feet measured 5.55 watts compared to our targeted performance of 4 watts. Power received at five to 10 feet measured 3.74 watts compared to our targeted performance of 2 watts and power received at 10 to 15 feet measured 1.06 watts compared to our targeted performance of 1 watt.

5.5 Watts compared to around 100 mW (at best)? Only a factor of 55 off (165x at 1 meter) after a further 2 years of work. Talk about diminished expectations.

I wrote two more posts on Energous in the subsequent 2 days, you can find them here and here.

Further thoughts on Energous

Yesterday's blog post on the Energous FCC Part 18 approval was written quite quickly, so I'll follow on with some additional thoughts here:

1) After the initial kick to stock price, it sat quietly for most of the day and then shot up in the afternoon, ending up 160% or so. This morning it's up a further 25% or so, and is approaching $30. At around $50 they become a billion dollar company. Looking at who is buying and what happens to the shorts once that data is available will be interesting. It reminds me again that this is a stock to stay away from, its volatility is what makes it attractive, and as the average guy that's where you get fleeced. Put your money in if you will, be aware it's a gamble. This is also the time where I preemptively point out that I do not hold any position on WATT stock, and make no money whether it goes up or down.

2) I used the Friis equation to calculate power to various distances - that's only truly valid in the far field, and with distances of 50 cm and wavelengths of 33 cm, that's not really the case. Unfortunately I don't have the details with which to do the near-field modeling, so this is the best approximation I have unless Energous want to give more information. I expect it's there to within a factor of two, but that the geometry of the transmitter strongly increases the gain at around the 50 cm mark at the expense of further out.

3) Powercast, who have had long distance wireless charging by RF available as a product for years, also got FCC approval for their product this week. (FCC approval details here) Unlike Energous, Powercast seem to be very open about their numbers and actually have products you can buy. Why aren't they taking off like Energous did if they already have such a product? Yeah, exactly... 

4) Lots of Energous fans are saying "it's only the beginning, it all takes off from here and they just improve". No, no they don't. There are fundamental laws of physics here that mean you don't just suddenly get to get 10x better. Semiconductor processes, shrinking feature sizes every few years, have conditioned people to think that is possible with everything - it simply isn't. Now if you could shrink the wavelength without changing any other characteristics of the wave or system then sure, you could do it. Or maybe if you reduce how much RF radiation gets absorbed by water. How about being able to get the benefit of focusing the power while broadcasting in all directions? Those would be awesome and make this RF method safe, efficient, and effective, so let's just do that. Except those are impossible - you may as well tell them to invent time-travel. 

Just. Not. Happening.

Where it could transmit more power is if the FCC literally raise the output limits, which has significant implications for safety as well as operation of other equipment. I do have strong concerns about the potential for inappropriate pressure from the FCC chair on the regular FCC employees to revisit output limits to favor Energous at the expense of our safety. Why? Well...

5) The FCC chairman tweeted his congratulations to Energous. We've got used to changing norms over the last year, but a government office promoting a private company is out-of-order. If they do for one, they do for all, so where's his mention of Powercast? Of all the things I see happening with Energous, this is the most disturbing, and yet I see no-one blinking anymore about such an abuse of office. 

6) I continue to be in awe of Energous' genius in playing this game. They have a pair of twos and just keep raking in the cash.

I wrote three more posts on Energous in the subsequent 4 days, you can find them here, here, and here.

Energous and FCC Approval for Mid Range Device - What Does It Mean?

Six months ago wireless power company Energous claimed they'd have FCC approval for their at-distance charging, and I was highly skeptical of the claim. Yesterday the FCC did approve their mid-range device under Part 18 - the company stock price doubles, doubters are proved wrong, and the sky is the limit for Energous. I was so wrong, I'm here to apologize and beg for everyone's forgiveness as to my stupidity.

Yeah, right, of course I'm not. I'll do a quick analysis below (next day thoughts were added here) as to what has happened but it's essentially this - Energous have done what they did with the Watt-up Mini, which is to have done the bare minimum to get an approval on a essentially pointless and impractical device that doesn't actually charge at a noticeable rate, but that turns the charge light on, and as it's such a technically complex issue very few people understand what it means, see "FCC Approval", and that's it.

Energous press release is here, the conference call is here. (Skip to 19 minutes for Q&A). You can read my many Energous posts here, but the one on FCC approval in particular is here. The key quote was:

So, basically, unless they either get the FCC to change the rules, in opposition to a vast entrenched business interest and wreck WiFi for everyone, or reduce their power output to the point where it is an utterly pointless product, then I just don't see FCC approval for their devices.

And this is what's happened as far as I can see - they've put out a useless device hobbled to meet FCC guidelines for part 18, and it seems most people are dumb enough to fall for this. Part 18 rules can be found here.

While I'm still reading through and analyzing the FCC reports, here's a summary of my opinion of this 'product':

• Fails to charge a phone with a measly 100 mW at best (about 10x lower than needed)
• Unsafe for humans or animals closer than 50cm
• Highly inefficient, around 99% loss
• Weak safety measures to limit unsafe exposure
• Incompatible with previous products as claimed earlier
• Obtrusive impractical transmitter
• Small useful area of operation
• Very limited ability to steer the beam
• Huge "pockets" of energy about 50cm in diameter

The product

Energous have two approvals for the devices in the FCC database, one at 913 MHz and the other at 2.4 GHz. I assume the 2.4GHz approval is because they use the 2.4GHz range for communication with the receiver, not for power transfer. The previous Watt-up Mini operated at 5.8GHz so unless another approval appears soon, there is no interoperability with their previous devices, as they had claimed.

The device itself is a curved bar, certainly not flat and unobtrusive. It would be very hard to place on the wall, or anywhere in a room without becoming an obstacle. Why curved? Well I'd guess it simplifies the beamforming so they can create as tight a focus as possible and maximize the power transfer at the expense of steering. As they have only 12 antenna in the bar, it would be unlikely that they would have fine control over beam steering anyway.

As the transmitter is a bar it's a pretty limited area that can be irradiated - about +/-45 degree up and down, and +/-30 degrees side to side. At the 90 cm mark that means a region about 2 meters up and down, and 1 meter side to side - a pretty small and inconvenient target area, and that's the biggest it gets. Previous claims of charging Internet of Things devices all around your room aren't supported by this arrangement.

Why 913 MHz? I assume the FCC just said no to them putting huge amounts of power out in the wifi range and stopping that from working, so given allowable bands it was that or 24 GHz.

While not stated explicitly, it appears that the system won't charge if there is any movement within 50cm, so it may be that there's a minimum distance over which it will charge. This needs clarification.

The 'pocket'
Energous have always talked of how they create 'pockets' of energy - which is marketing spin as the laws of physics prevent such pockets being arbitrarily small. The larger the transmitter and more elements it has the smaller the focus, down to a limit set by the wavelength of the energy. The power is to be transferred at 913 MHz, which is a 33 cm wavelength, and that's about as low as you would expect - a 'pocket' that is a sphere 30cm in diameter, about the size of your head. This is backed up by their FCC test data, you can see here that the half power points (-3dB) make it about 50cm across.

As you can see in the image below, depending on how the beam is 'steered' you don't get a "pocket" as much as a "smear" - have your phone on one side, but power is definitely going elsewhere. The image below from the FCC

The safety measures
To meet the FCC guidelines, Energous had to implement a number of safety features which prevent the system from working when anyone is in the field of operation. Basically, it appears the amount of power a person would absorb would be illegal and unsafe so there are motion detectors that switch the system off if movement is detected within 50cm of the transmitter - which is, to me, a shockingly weak safety system.

This is one of the frustrations of dealing with amateurs when it comes to safety. You don't build safety systems based solely on common use cases, you think of all the edge cases because customers are annoying that way and will do things you never imagined with your product. Things also change when you aim a product at millions of users - tests on even tens or hundreds of thousands of cases simply won't show up what happens in the field. If you have a product that can't cause harm then there's no issue other than annoyance, but with real health implications like transmitted RF power, there are serious consequences to failures. Quite how their sensing system deals with a sleeping person, pet, or child I'm not sure, I see it as a major flaw. These flaws are easy to see and it's an accident and a lawsuit waiting to happen - another reason I don't ever expect to see this as a real product.

The power
Here we get to the juicy part - how much power will it transmit? Well with around 12 antenna each at around 0.8 W, the total power it can send out is around 10 Watts. Fantastic, right? Well that's not what is received at the target - looking at those numbers and using the Friis equation, (and some estimation, not enough data to be 100% sure) we get around 100 mW at 0.5 meters, and around 30 mW at 0.9m. A phone will need somewhere between 500 mW and 1000 mW to really start charging and be useful, so the power sent is essentially enough to switch the charge light on, and not much more. To even match their rather wimpy Watt-up Mini they'd need to improve it by 10x.

That has to be wrong? It has to send more than that! Well, when asked in the conference call as to the power sent the CEO replied that the power is "not that significant" and dodged the question.

The efficiency
10 Watts transmitted, and 100 mW received gives around 1% efficiency. 99% of the energy is lost as heat, which granted isn't too much, but essentially you've created a very expensive method of mildly warming a small part of your room, and failing to actually charge your phone in the process. This is a generous estimate as well, it does not account for the loss from the wall socket to antenna emission, so that 1% efficiency is a ceiling and goes down from there.

The conference call
The conference call was as expected - very little actual data and dodging of the few limited questions that were asked. The CEO makes clear the power received is minimal and doesn't want to give that number it's so bad. They instead stress that this is an new door that is open and it's all up from here, and give vague comments of partners selling devices in the future. Talk of useful power is deliberately downplayed. Brilliant marketing and bamboozlement of a non-technical audience. Once again, Energous show their genius in extending this run - they'll no doubt be issuing stock or some other form of capital raise to keep paying those executives that ~$5 million a year.

Stock price
The stock price is up near 100% today, back to where it was in early summer - but surprisingly not higher. Shouldn't it be trading above that now it has FCC "approval"? Let's give it time to see.

Conclusions?
Any big name customers? Can we expect Apple to be buying them up? Well, IMHO, Apple isn't dumb, and neither are any other big guy. This is going to be the unsavvy public putting in money again and again on the hopes of a big win. I don't expect to change their mind, at this point it's near a religion to many, and all I'm doing is pointing out the obvious.

The roller coaster ride just keeps going...

I wrote four more posts on Energous in the subsequent 5 days, you can find them here, here, here, and here.

Theranos gets $100 million funding - is it what it seems?

Few things surprise me in the funding of startups anymore - when you see a juicer that gets $90 million that's pretty much the end of shock as to what gets money - but this week saw my jaw drop on the funding news front as Theranos, the supposed blood testing company, received a further $100 million. This scoop was from Lydia Ramsey at Business Insider, and follows John Carreyrou of the Wall Street Journal who did fantastic investigative journalism on Theranos over the last few years. Theranos are pretty much the poster child for what's wrong in tech investing. Here's a quick summary of why not to invest in Theranos:

• The technology never even vaguely met the wildly exaggerated initial claims
• Sued by investors to the tune of >$100 million for fraud (settled out of court)
• Sued by biggest customer for around $140 million for fraud (settled out of court)
• CEO/Founder banned by the federal government from running their main business line 
• Sued by Arizona AG for inaccurate blood tests on >100,000 patients
• Never/rarely subject their results to independent third party scrutiny
• Placed the safety of patients at risk
• Ongoing US Attorney and SEC investigations

Essentially, they're not "good actors" in any sense of the word - they've had to be sued by both investors (nearly unheard of) and customers, and risked the lives of patients with their blood tests. Why would you give them money? I don't think I'm alone in my initial stunned reaction, from what I see and hear the VC community is also pretty shocked by this one, even they don't want to go throwing good money after something this bad. After a day or so though, I began to think about it more, and I've come to the conclusion that it's unlikely that Theranos will ever see that full $100 million, and instead it's a savvy play for IP from a private equity firm.

The history

I've written fairly extensively on Theranos, but have not posted in over a year because I thought they were pretty much dead and the story was on hold until they went into bankruptcy or criminal prosecutions began. More fool me. A quick summary for those who haven't been following - Theranos claimed to have revolutionary blood testing technology that would identify many diseases from a  single fingerstick drop of blood, and raised >$750 million from VC (mostly non-traditional for biotech ones), had a board full of ex-government bigwigs including current Secretary of Defense Mattis, and had a Stanford dropout young CEO who the press loved. In the end it turned out to be a fraud, the technology could not do what they claimed, used heavy handed legal threats against whistleblowers and media, had to refund nearly $5 million to 76,000 patients for inaccurate blood tests, had the CEO/founder banned from operating a clinical lab for two years by the government, and eventually were sued by both customers and investors for huge amounts of money (estimated at over $100 million in settlements so far). There are ongoing US Attorney and SEC investigations, and likely other federal criminal investigations too. Having gone through some rounds of layoffs amounting to over half the company, everyone was just waiting for the bankruptcy filing and then the news of this funding dropped.

The investor

The investment comes from a group who often invest in 'distressed' companies - Fortress Investment Group LLC - that is they look for bargains and drive hard deals with companies desperate because they have nowhere else to go. There's a good history of the company here, and if you want to see a financial company where the executives make ungodly sums of money whether they succeed or fail, this is it. The five top executives took home near $1.7 billion just before they IPO'd in 2007, after which the stock plummeted by around 75% (at one point by 97%). 

The group had a turnaround earlier this year when SoftBank agreed to buy them for $3.3 billion, no doubt giving another payday to the executives at the company. For those who aren't aware, SoftBank runs the world's largest investment fund, the $100 billion "Vision Fund", and have made enormous purchases and investments such as to chip maker ARM Holdings for $32 billion, and Uber for $10 billion.

This is not a company where they invest in good social works or for the sake of humanity, they're in this deal because they smell money.

The investment

$100 million is a lot of money, even for a sizable company like Theranos. Seeing that kind of investment in a fraudulent company raises anger in those who have diligently worked to develop tech based on shoestring budgets, especially if they've been passed over for funding because they're told it's not as advanced as Theranos' smoke and mirrors pitches had people believing the state-of-the-art was. I'm not sure it's quite what it appears at first glance though, so let's take a look at what we know. Here are the key quotes from the WSJ article:

Theranos Inc. told its investors this week that it has secured a $100 million loan from Fortress Investment Group LLC

The loan from Fortress is collateralized by Theranos’s patent portfolio and the deal grants Fortress warrants for 4% of the company’s equity

The loan is “subject to achieving certain product and operational milestones,” 

This leaves the possibilities for what has happened wide open, so assuming that Fortress are savvy and seeing a deal here, I'm going to make some guesses as to what's happening.

• This is a loan, not a traditional investment such as for equity or for convertible debt. In the event of bankruptcy this takes precedence over all other investors such as shareholders - they get paid back before anyone else, so it's safer than equity investing. 
• It's a loan on certain terms and if they don't meet those terms then the company's IP (patents etc) likely become the property of Fortress. (USPTO quick search turns up 115 patents, smaller than I would have expected). They don't just get paid back first, they get the choice assets, likely the only part of the company that has value. What's the value of that IP? Have they evaluated that it could be sold to another biotech firm such as Roche for >$100 million?
• The money is conditional upon reaching milestones - that is, they don't just get handed $100 million to do with as they please, it's going to be metered out in multiple tranches if and only if they hit targets. These targets will be various steps along the way to "receive FDA approval for Zika virus test" and possibly include "not to be sued by investors, customers, or face criminal charges from any federal agencies". Basically, Fortress dole out the kid's allowance very carefully, and will have chosen the trigger points carefully.
• Fortress get warrants on 4% of stock - this means they can choose to buy up to 4% of the company stock at a set price, at a later date. We don't know what that price is, but you can expect it will be at $100 million or most likely much lower. If Theranos pulls a rabbit out of the hat and makes a success of things, becoming a multi-billion dollar company, then Fortress get to own a piece of it at a discount.

So Fortress have arranged a deal where they don't have to put the full amount in up-front, but are still ahead of any other investor, get to own the only valuable part of the company if it goes wrong (the IP), and get discounted stock in the company if it, through some miracle, succeeds. With the right milestones and triggers, this could be a deal where Fortress win no matter what happens, and may actually come out better should Theranos fail. I wonder if Fortress have essentially arranged a deal to make sure that all the good parts are gone by the time everyone else reaches the bankruptcy auction.

Why would Theranos take such a deal? Well, because they have to choice - it's this or bankruptcy.

The outcome

Can the technology succeed? Putting aside who would trust their personal health to a company with Theranos' reputation, possibly, but there's something to look at that is pretty damning as to what is happening internally. From WSJ:

In May, Theranos announced in a press release that it had hired Cass Grandone, a former Abbott Diagnostics executive, to head its product development. Ms. Holmes was quoted in the press release as saying that Mr. Grandone’s leadership would be critical to the company. However, Mr. Grandone resigned last month after just six months on the job, according to a person familiar with his departure.

When someone like this gets brought in, it's to save the product. They get given incentives and bonuses that make it very, very worth their while to see things to completion. If he's leaving after only 6 months to me it says either the technology can't make it to product, or the company is screwed up so badly that even good tech won't succeed (read: clashes with unreasonable CEO). It could be either, or both, but is irrelevant - that Grandone walked is a very bad sign for Theranos. (At least he didn't feel so much pressure he committed suicide.)

So what will happen? Who knows where this bizarre story will end, however I would not put stock in Theranos succeeding - IMO a demoralized company with technology at best no better than the competition, a CEO/founder likely to still believe she can succeed and willing to take any deal to avert bankrupty, with potential for criminal charges and further lawsuits hanging over their heads, will not be a company focused on a world-beating product. 

Perhaps Fortress will walk away from this with all the IP for $10 or $20 million, and leave the rotting carcass for everyone else who put in >$750 million. Quite the deal for Fortress if they can pull it off.

The Last Jedi

A review of The Last Jedi - major spoilers below if you've not seen it yet. TL;DR - you're going to see it, and it's going to make a ton of money, what do you care what I think...

I'm a pretty big Star Wars fan - I was 5 when the first one came out (now called "A New Hope") and can remember standing in line with my family to watch it, and later swinging sticks around making "zzzmm" noises with our "lightsabers". I didn't appreciate how good Empire Strikes Back was until I was older but the 8 year old me still liked it (again enough to remember going to see it with many other friends as a birthday present for one of them), and the Return of the Jedi at age 11 which I loved, even though I found Ewoks pretty dumb and wondered why they weren't Wookies instead. Once again, I enjoyed it enough to remember going to see it with two of my friends at the end of the school year. And then there were the prequels which in order were "awful", "mostly awful", and "ok in places", pretty much showing that the more control Lucas had the worse they were.

Inbetween those films you could get your Star Wars fix with video games. The Dark Forces FPS series was a lot of fun, but the best games were X-Wing, and later Tie Fighter, where you got to fly first as a rebel, then as an Imperial pilot. Tie Fighter just needs redone with modern graphics and good multiplayer code to be a game that would work today, but LucasArts managed to screw that up and having spoken to one of the lead programmers, the source code is lost and no chance of that resurrection happening. Oh, and in the early 2000's the Knights of the Old Republic RPG games were fantastic - they "got" Star Wars, better than Lucas did in the prequels.

OK, is that enough space for spoilers now?

Right - The Last Jedi. 

The Good

For the first time we see a good reason for someone's turn to the Dark Side. Kylo Ren is troubled, Snoke tries to turn him, and then his douchebag uncle Luke Skywalker tries to kill him. What choice did he have but become Sith? You can see why he is conflicted, and desperately looking for a place in the world and someone who will understand him. The entire relationship between Kylo and Rey is great, as each tries to escape the manipulations of their elders and find their own way. Best parts of the film by far.

There's also recognition that the old ways of the Jedi didn't work, that the Skywalker family have been nothing but giant screwups, and things need a big reset.  There's a chance for renewal, a way for something better to be built from the ashes of what's left, perhaps moving to "Grey Jedi" where they are neither the preachy Jedi nor evil Sith - the film does make a point of stating that the Force always tries to create balance and will literally create a new Jedi because there's a growing power in the Sith. Rey is apparently a kid with nobody parents (at least according to Kylo, I'm not sure, there's still the "clone from Luke's hand" theory), and finally we might have a story whereby being of "royal" blood isn't critical to being important. I'm hoping that Episode 9 is the end of the Skywalker saga, they just need to die out.

Last, and truly awesome thing about this film - it did not end with someone flying a small ship inside a bigger ship to shoot a doohickey and blow up said big ship. We're now back down to only 50% on that score for the main films.

The Bad

After that - yeah I have nothing. As dumb as Star Wars films are, the characters had an arc, a purpose, a consistency, and yet here they simply don't. I can forgive things like space bombs that work from gravity, and the most boring chase scene ever, but huge swathes of this film are utterly pointless - Finn and Rose's side mission is an utter failure, basically down to the fact that they park the car on the beach instead of the space port. Two whole movies in, and I don't know what the point of Finn is. Would anything be different if he simply did not exist? When he finally is about to do something of note and save the rebels, Rose stops him. He does manage to kill another pointless character, Captain Phasma, who again had no purpose in both recent films and despite being a badass soldier gets killed by an ex-janitor.

Poe Dameron is the second most frustrating character in the film. Now, I'm not someone who always follows the chain of command, and am against the death penalty, but that guy needs to be shot out an airlock for what he did. First he completely ignores orders and gets the majority of his ships lost (good trade though, a few bombers for a capital ship), then starts a mission against orders, then instigates a mutiny, and finally gives away the plans for the escape of the rebels and gets most of them killed. Granted, the Vice Admiral was terrible in commanding the respect of her troops, but that was mutiny. The entire point of that Poe/Finn/Rose side story seems to be to ensure that the rebels get nearly wiped out. Unlike Empire Strikes Back, they didn't lose to a better prepared and more powerful enemy, they lost from their own stupidity. I want to like them and for them to succeed, but they're so incompetent that when Finn and Rose were about to be executed I simply didn't care - no loss for the resistance, and maybe someone competent will replace them.

Lastly, Luke. What a douchebag. I suppose he starts this film like he does Episode 4 - a whiny teenager throwing tantrums for not getting what he wants. He created the next Sith because he was tempted and failed to either resist or follow through and took the worst possible route of starting but not finishing his decision to kill Kylo Ren, and then ran away rather than try to fix things - Darth Vader had done far worse and could be turned back, but Kylo can't? Then when someone who wants to make a difference turns up he refuses to train her - yeah because she'll just go away and disappear if you tell her no. At least he ends things by giving the rebels a chance to escape before removing his sorry ass from the universe. One less Skywalker - now just one(ish) more to go.

When I was a kid we played as Luke, Han, Vader, Wedge (good Scottish pilot doing the actual work), who were all cool characters that achieved things despite their flaws. What is the point of most of the characters in the latest Star Wars films? Kylo and Rey are about it, and even there Kylo is whiny and suffered major losses in both films - Rey at least comes from nothing and against the odds has had some success.

So where does this film sit in the list of best Star Wars films? For me, the original three (4,5,6) are still the best, then it's a bit of distance to The Last Jedi, before a big drop until the next few with The Force Awakens and Phantom Menace fighting it out for the wooden spoon. I seem to be pretty much alone in that, for some reason people are putting it up there with ESB, but I just can't see it. At least JJ Abrams is somewhat forced into doing a new start for Star Wars in Episode 9, hopefully not with a mining ship time travelling and resetting everything though...

uBeam Funded? A Greater Fool Found?

After months of waiting, the day is finally here when uBeam are talking about their next round of funding - and if you want to get a piece of this action yourself, then you're in luck. Given it's such a phenomenal investment opportunity the Venture Capital community, renowned for their desire to see the little guy get a slice of the profits, is going to let you in on the deal. OurCrowd, a crowdfunding investment company who pool money from lots of individual smaller investors, is participating in this round and has sent out a solicitation for you to join in. The entire message is at the bottom of this post, but here are the introductory paragraphs:

OurCrowd is investing in uBeam, a US based company pioneering long-range wireless charging for electronic devices. In an era when consumers are attached to electronic devices, one of the most common pain points is poor battery life. uBeam has developed an innovative solution which enables untethered long-range wireless charging for battery-powered devices. 

We are joined in this round by Andreessen Horowitz (Facebook, Twitter, Airbnb, Skype), Upfront Ventures (Bill Me Later, Ring), Founders Fund (SpaceX, Palantir, Lyft), Ludlow Ventures (AngelList, Product Hunt) and Mark Cuban, owner of the NBA's Dallas Mavericks.

Very impressive. This would be the Series B for the company, a funding round often associated with a product that's about to scale and be really taken to market. uBeam appear to have been looking for this funding round since February this year when they gave a demo of their system, so over 9 months in the making. Given the hype surrounding the company, and the very favorable conditions for fundraising at the moment, I've been surprised it's taken so long for them to get here - surely all the big players will be desperate to put in money?

Some history

As a recap, Crunchbase lists the company as having raised a Seed Round in 2012/13 of around $1.7 million, a Series A in 2014 of around $10 million led by Upfront Ventures, and a Convertible Note round in 2015 of up to $15 million - a total of around $27 million. It's been two years since the last big fundraise, so it's near time for the company to be getting more. Some pointed out that a Convertible Note round was unusual, as normally crowdfunding is done prior to major institutional rounds, not after, and in this case uBeam did the Convertible Note after Series A. I cover some of this in a previous post, as does Garrett Reim of the LA Business Journal. It's worth remembering that this $15 million is from less sophisticated investors (though still accredited), and that the original Series A investors then are behind the convertible note holders in any liquidation until they convert to actual equity. Nearly $5 million of that $15 million came from OurCrowd. Remember that $15 million number, and that the bulk of uBeam's funding has come from smaller investors, not institutional VCs.

The current round

While it doesn't say clearly, I expect this round here has to be an Equity round (that is, investors get stock in the company), not a Convertible Note round (investors get debt that may become stock) - two consecutive Note rounds would be really messy, and at some point someone has to value the company - basically, a large institutional investor has to put a price on the company and convert that debt. Any investors here will be paying for actual common stock in the company.

The solicitation also indicates that major players such as Andreesen Horowitz (a16z) and Founders Fund are invested in this round - these are previous investors from the Seed and A rounds coming back in (or at least, that's what's being said here). These are serious players, who don't want a ton of tiny investments, or cap tables (who owns stock) that are large and varied - they want to put large sums in and get an Uber. If this were an impressive technology on the verge of 'take-off' they would be all over this round getting as large a slice as they could. So - are they?

Caveat

I'm going to put in a caveat here that I am working off only public information, and things may be different, and I do not have access to the information listed in this solicitation - I have avoided downloading it so I do not have to sign up to the Terms of Service that limit what I can do with it, nor will I watch the webinar - so what follows is my best guess, and opinion, based on info I have at this time, along with questions others should be asking.

Passing the risk
I've written for some time about another wireless power company, Energous, and that to me the genius of them is that rather than waiting until company sale or IPO (offer stock in the stockmarket) to realize profits, they bypassed that and went straight to IPO without a product or revenues. The money flows into the company (and the richly rewarded executives) while the risk is borne by the individual investor. The SEC regulates this and at least there are stringent rules, even if they can be gamed. Initial Coin Offerings (ICO) are relatively new and essentially use a 'cryptocurrency' (similar to BitCoin) to crowdfund a project. There are few protections on these and here the money flows to the company, and the risk to the investor - the SEC warns ICOs can be pump and dump scams. Kickstarter can get small amounts of money for projects, but again there are little in the way of protections for those putting money in (not even investors), and there are public cases of the company taking the money, and the "investor" left with nothing and no recourse.

The upshot of all this is - there are more and more ways for companies to take financing from less sophisticated investors, while pushing the risk onto them. An institutional VC can at least do due diligence, has a legal team, and full time staff to monitor the situation - they can even go to court to get money back from the company in extreme cases, such as what happened with Theranos and investor PFM. This is not to say there aren't legitimate and great uses of these fundraising avenues - there absolutely are. And it's not to say anything untoward is happening here. However there is clearly an increasing set of options for both small investors to get in, but also for the risk to be passed to them, the people least able to evaluate effectively. Crowdfunding groups are there to do some due diligence on their part, but is it enough?

Some, Most, or All?
So the question then becomes - who is taking the risk in this round? How much of this round is OurCrowd (and thus the individual investor) taking in % terms? Is it some, most, or all? How much are they putting in compared to Andreesen Horowitz, or Founders Fund? If it's a small amount, say 10 or 20% then that makes it look like the big guys are serious, and in a way the smaller guys get the "protection" of the heavyweights fighting on their behalf. If it's 50% you have to wonder why the institutional VC is letting such a sure thing out of their hands - and if it's over 75% then alarm bells have to be going off. If the Crowdfunding component of this round is the majority of the new money, then something is off. It means the institutional VC is running from this investment and there will be a reason for that - they view that the company will not sell for enough to warrant their investment. Typically, the rule of thumb is "sell for 10x money invested" so if the total the company would have raised after a round is $45 million, they have to view it will sell for $450 million or more to be worth their time.

So are the VCs leaving $100 bills on the floor for you to pick up?

New vs old money
One other thing to remember is how a round is 'sized'. If someone says "it's a $100 million round" do they mean the company valuation, or the money going into this round? Usually it's the latter, the amount of money going in. That can be a little more complex though - sometimes in the case of a priced round, a the total from a previous convertible note round gets "rolled in" with the new money to give a bigger total. So for example if there had been a $2 million convertible note, then a $5 million equity round, that can be classed as "$7 million". You need to know what's in there. So whatever this new round is, if it includes the previous note of $15 million, it sounds bigger than it is. I'd watch that number carefully. (Note, there are multiple methods of doing the calculation,such as a Pre-money conversion method that changes things. Looks like an actual $20m round. So likely what will happen is there will be a set value for the pre-money for the B round, the Convertible Note will trigger at a valuation that takes the "convertible note post-money" to this Series B pre-money, then the Series B dilution occurs. I'll do an example of this in a later post, it's not straightforward - but essentially it's a clean $20m round and the $15m is not included in that)

Questions, questions, questions
So if I were on the call, what would I want to know to answer the above? I'd want to know:

1. Who is the lead investor and pricing the round?
2. Are the named VCs like a16z, Founders Fund etc actually putting money in on this Series B round? How much each? Or are they just names of previous investors, or putting in token amounts?
3. What are the pre- and post-money valuations of the company?
4. How big is the Series B round in total? 
5. Is the Convertible Note round included in that Series B total number?

Summary

So it's no surprise that uBeam are getting another round, but what is a surprise is that it's taken so long, and that it appears to be led by Crowdfunding and not institutional VC. If this is what's actually happening, it points to concerns on the part of VC and their willingness for small investors to take the risk. Are they following the path of Energous and others, looking to bypass the standard fundraising methods? If so, expect a continuation of uBeam walking back earlier claims of performance, attempts to diversify into other areas before solidifying their primary market, and moving to the "fabless" model of licensing rather than production. 

I'm eager to see what's happening here, and as I get more information I'll update. Whatever OurCrowd set as the target, I expect an oversubscription. At some point though, this will all have to be public through SEC filings, so we'll see what's actually going on eventually. 

Update:

It looks to be a $100 million pre-money valuation, with a $20 million claimed raise to give  $120 million post market value. The $15 million from the Convertible Note round of 2015 I would guess will be taken into account prior to the Series B, which with a typical "kicker" would mean a "pre-pre-money" of around $82 million (you add the $15 million with about a 20% kicker ($18 million)). That's quite a valuation for a company with clearly no product, no revenue, and first claimed product near two years away. It's still lower than the market cap of the likes of Energous, which floats between $200 and $350 million. 

Is there a liquidity preference on the preferred stock coming out of this Series B? If so, it might explain the high valuation. Liquidity preference is a way that certain shareholders get paid twice for their investment when the company is sold. As an example - imagine VCs invest $10 million in a company that gets them 20% of the stock, the two founders have 40% of the company each, and the company is sold for $100 million. If there is no liquidity preference then they get $20 million paid out, so a 100% return, and the founders get $40 million each. Now we do the same but with the VC on a 1x liquidity preference. Because of that 1x, first of all they get their initial $20 million back, and then they get 20% of the remaining $80 million, so they get a total of $36 million. This leaves $64 million between the founders who then get $32 million each. Here you see the founders go from making twice what the VC did, to less, just because of that liquidity preference. Go to a 2x preference and the VC takes $52 million, and the founders $24 million each. You can see why a VC would value the company higher under those circumstances.

Another interesting aspect is that there does not appear to be a single new investor - it's all investors from previous rounds. Did none of the other big VCs want in on this? I get the feeling this is now a race to flip the IP of the company before it's too late. How do you extract money from something like this after you've invested millions? This is going to be fun to watch. I'll update on the tech side in a few days - but there won't be anything new if you've been reading this blog, just a confirmation of what has been written before.

From here on down it's just a copy of the solicitation, nothing new here.

The OurCrowd Solicitation

OurCrowd is investing in uBeam, a US based company pioneering long-range wireless charging for electronic devices. In an era when consumers are attached to electronic devices, one of the most common pain points is poor battery life. uBeam has developed an innovative solution which enables untethered long-range wireless charging for battery-powered devices. 

We are joined in this round by Andreessen Horowitz (Facebook, Twitter, Airbnb, Skype), Upfront Ventures (Bill Me Later, Ring), Founders Fund (SpaceX, Palantir, Lyft), Ludlow Ventures (AngelList, Product Hunt) and Mark Cuban, owner of the NBA's Dallas Mavericks.

We’re hosting a webinar/conference call (Wednesday, November 15th at 7:00PM Israel / 12:00PM New York / 9:00AM San Francisco) for investors to meet CEO Meredith Perry and learn more about uBeam.

Register

The Need for Untethered Wireless Charging

Everyone who owns a mobile phone or device has encountered the struggle of low battery life. To solve this, uBeam has developed an innovative solution which enables true wireless charging for battery-powered devices. uBeam works by harnessing the power from ultrasound. The system wirelessly transmits focused beams of ultrasonic energy to devices outfitted with their proprietary receiver. The ultrasonic receiver technology (which can be attached to or built into a range of devices) converts acoustic energy into electrical energy, which charges the device. The solution is expected to be capable of delivering energy to charge devices like smartphones, wearables, IOT devices and more in real-world scenarios such as coffee shops, office space, homes, gyms, airports, or anywhere a transmitter can be placed.

Unique Solution with Fully Functional Prototype

uBeam has already built and demonstrated several fully functional, prototype wireless power transfer systems, which can charge multiple smartphones in the air simultaneously, even while the phones are in use. uBeam’s solution has been deemed the wireless power “category winner” by some of the largest electronics companies worldwide as it can transmit the most power over the largest distance to the greatest number of devices simultaneously while staying safe, within regulatory limits, and without issues of interference. uBeam’s technological approach has a clear advantage over others as it is the only known wireless power technology that doesn’t use electromagnetic energy for power transmission. As ultrasound isn’t on the electromagnetic spectrum, uBeam is therefore not limited by the regulatory, safety, and interference hurdles of its competitors. uBeam’s technology does not interfere with other electromagnetic technologies that use RF and microwaves such as standard communication systems and devices (WiFi, radio, cell phones, etc.). The Company has a strong intellectual property portfolio with 92 domestic and international patent assets, and 17 granted patents. 

>>>View full diligence material on uBeam here

Market Opportunity 

According to Allied Market Research, the global wireless charging market is set to reach $37.2B by 2022, growing at a CAGR of 44.7% from 2016 to 2022. Research shows that increased sales in the portable electronics and wearables market, as well as in the electric vehicles market, have created demand for new forms of energy, further driving the growth of the wireless charging market. uBeam believes their technology has applications that extend well beyond power transmission - into haptics, autonomous vehicles, rear parking sensors, and more. The rear parking sensor market alone is a several billion dollar industry.

Skilled Management Team

uBeam is led by CEO Meredith Perry, who was selected for Forbes’ prestigious ‘30 Under 30: Energy’ list, and for Fast Company’s ‘100 Most Creative People In Business’ list. Meredith is joined by EVP & CTO, Larry Pendergrass, a physicist and former engineering executive at Tektronix/Keithley, Agilent, and HP, as well as COO Kostas Mallios, who recently sold his last two companies to major corporations in a span of 24 months. Kostas was a GM at Microsoft for 15 years and was also the Vice President of Intellectual Ventures.

I'm Interested

In the long term, the investment committee at OurCrowd believes that uBeam could become an infrastructure technology similar to Wi-Fi, providing seamless charging, data transfer, and seemingly infinite battery power. 

Looking forward to you joining us on the call,

OurCrowd Investments